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  • 1. All About Stock Options

    1. All About Stock Options

    My goal is to give you a basic understanding of what stock options are all about without hopelessly confusing you with unnecessary details. I have read dozens of books on stock options, and even my eyes start glazing over shortly into most of them.

  • 2. Check Out Auto-Trade

    2. Check Out Auto-Trade

    Auto-Trade is a service offered by several on-line brokers. Auto-Trade makes it possible for an investor to carry out an options strategy in his own account without becoming an options guru or making all the trades on his or her own.

  • 3. Never Buy a Mutual Fund

    3. Never Buy a Mutual Fund

    Never buy a mutual fund unless it is a no-load index fund with the lowest cost structure. (I will tell you where to find it later.)

  • 4. Turbocharge Your IRA

    4. Turbocharge Your IRA

    Most smart people have set up a Roth IRA, 401(k), or other qualified retirement program. For some of them, it may be the only stock market investment they own.

  • 5. Double Your Money the Lazy Way

    5. Double Your Money the Lazy Way

    In spite of the odds against winning, many people seem to like to invest in individual stocks – sort of like picking horses at the race track.

  • 6. The 10K Strategy

    6. The 10K Strategy

    The 10K Strategy is my favorite investment strategy. I have used it to make an average of over 50% a year for three out of four consecutive years. I have now added a twist to the strategy so that annual returns might be less than those years but there should be a much higher likelihood of its succeeding.

  • 7. Trading ETF Options

    7. Trading ETF Options

    Exchange-Traded Funds, or ETFs, are index funds that trade just like stocks on major stock exchanges. All the major stock indexes have ETFs based on them, including: Dow Jones Industrial Average (DIA), Standard & Poor's 500 Index (SPX), and Nasdaq 100 Composite (QQQQ).

  • 8. Other Stock Option Resources

    8. Other Stock Option Resources

    Learn about some of my favorite stock option resources.

Get ahead in the market.

Terry’s Tips carries out an options strategy designed to significantly outperform the market and other conventional investments.

The strategy does not require picking the right stocks or timing the market. It primarily trades options on the S&P 500 (SPY) and can be used in an IRA.

Terry's Tips Stock Options Trading Blog

May 10, 2021

Make a Friend out of PayPal (PYPL)


On
Wednesday, PYPL blew past earnings estimates, as profits jumped 84% from a year
earlier. The EPS of $1.22 easily beat the consensus analyst estimate of $1.02.
Revenue was up 29%, also beating expectations. For good measure, the company
upped its guidance for 2021. The news was greeted by several target price
updates. The average price target is now above $317, which is 25% above
Friday’s close.





Although
the stock is up about 2% since earnings, it hasn’t blown anyone’s hair back so
far in 2021, as the shares are up only 8%. In fact, they’ve been flat for 3-1/2
months. But a longer-term view shows the stock’s monster uptrend since the
March 2020 bottom – it’s more than tripled – is alive and well. The rising
20-week moving average has guided the rally nearly perfectly, allowing just
three weekly closes below it during the past year. This trendline is sitting
near 255, so we’re looking at a put credit spread with the short put sitting
below the 20-week.





If
you agree that PYPL will stay above its 20-week moving average, consider the
following trade that relies on the stock remaining above $250 through
expiration in six weeks.





Buy
to Open PYPL 18Jun21 240 Put (PYPL210618P240)

Sell to Open PYPL
18Jun21 250 Put (PYPL210618P250) for a credit of $3.60 (selling a vertical)





This
credit is $0.05 less than the mid-point
of the option spread when PYPL was trading at $253. Unless the stock rallies
quickly from here, you should be able to get close to this amount.





Your
commission on this trade will be only $1.30 per spread.  Each spread would then yield $358.70. This
trade reduces your buying power by $1,000 and makes your net investment $641.30
($1000 – $358.70).  If PYPL closes above
$250 on June 18, both options will expire worthless
and your return on the spread would be 56% ($358.70 / $641.30).


May 3, 2021

Caterpillar (CAT) Drops After an Earnings Beat … And It’s a Bullish Sign

On Thursday, CAT did something it’s done for the past three quarters – it easily topped earnings estimates. The company reported $2.87 in adjusted earnings versus the projected $1.95. Sales ($11.9 billion) also soared past estimates ($10.5 billion). The numbers were well received by Wall Street, as a couple of brokerages raised their target prices.

April 26, 2021

Danaher (DHR) Earnings Bring Record High

DHR – a medical diagnostics and research company - reported earnings Thursday morning that blew away estimates. Adjusted earnings came in at $2.52 per share compared with 81 cents a year earlier and the analyst estimate of $1.76. Revenue soared 58% from a year earlier

Making 36%

Making 36% – A Duffer's Guide to Breaking Par in the Market Every Year in Good Years and Bad

This book may not improve your golf game, but it might change your financial situation so that you will have more time for the greens and fairways (and sometimes the woods).

Learn why Dr. Allen believes that the 10K Strategy is less risky than owning stocks or mutual funds, and why it is especially appropriate for your IRA.

Order Now

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TD Ameritrade

This Chicago brokerage firm with the unlikely name thinkorswim, Inc. by TD Ameritrade is considered by many to be the best option-friendly broker. For openers, they have extremely good analytic software and their option trading platform is exceptional. Thinkorswim Mobile has been called the best mobile app in the industry. In 2017, TD Ameritrade received 4 stars out of 5 in the annual Barron`s* Best Online Brokers Survey. TD Ameritrade was tops as an online broker for long-term investors and for novices. The company is the only broker that receives the highest 5.0 score for research amenities among all firms participated in the ranking last year.

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TD Ameritrade, Inc. and Terry's Tips are separate, unaffiliated companies and are not responsible for each other’s services and products.

Options are not suitable for all investors as the special risks inherent to options trading my expose investors to potentially rapid and substantial losses. Please read Characteristics and Risks of Standardized Options before investing in options

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